Petrol, diesel rates up by 80p after 4 months, LPG costlier by ₹50
Oil prices continue to rally globally as EU weighs ban on Russian oil imports
NEW DELHI: State-run retailers on Tuesday lifted the tacit freeze on fuel rates after 139 days by increasing petrol and diesel prices by 80 paise a litre after the assembly election process in five states including Uttar Pradesh ended this month. The increase comes amid surging oil prices in the international market, which soared to 40% at around $115 a barrel on Monday.
Public sector companies have also raised cooking gas rates by ₹50 a cylinder to ₹949.50 per 14.2 kg refill used in households. The practice of aligning petrol and diesel rates daily and cooking gas every fortnight was suspended because of unsaid political reasons, two government officials and three executives working in public sector oil firms said, requesting anonymity.
After the increase on Tuesday, petrol in Delhi was being sold at ₹96.21 per litre and diesel at ₹87.47 a litre.
Petrol and diesel rates were frozen since November 3, a day before the Union government slashed central excuse on petrol by ₹5 a litre and diesel by ₹10 to provide relief to the consumers. Many states also followed the suit by reducing value-added tax. The cooking gas price was last revised on October 6.
“The decision to start raising fuel rates was also taken to protect private fuel retailers – Shell, Nayara Energy and Reliance-BP – as they were on the verge of shutting down their pumps because dominant public sector players continued selling auto fuels at huge revenue losses,” one of the people cited above said.
State-run companies Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd enjoy monopoly as they control almost 90% of the Indian fuel market.
Oil company executives cited above said the 80 paise a litre price increase is “too late and too little” as revenue losses before the current hike were about ₹12 per litre and ₹24 a litre.
Russia is one of the largest energy exporters. The sanctions on Russia have adversely affected the global supply chain of essential commodities such as cooking oil, wheat and fertilisers.
NEW DELHI: Petrol and diesel prices increased by 80 paise on Tuesday and more such increases are on the way as retail fuel prices were steady for more than four months despite the recent surge in global crude oil prices, according to experts. This would not only impact the budget of consumers but also add inflationary pressure on the economy.
Oil marketing companies (OMCs) had last revised prices in November.
In the national capital, petrol was sold at ₹87.47 per litre on Tuesday, up from the previous price of ₹86.67 a litre. Diesel was priced at ₹96.21 a litre in Delhi, against ₹95.41 earlier.
Petrol prices in Mumbai, and Kolkata Tuesday were ₹110.82, ₹102.16, and ₹105.51 per litre, respectively. Diesel was priced at ₹95, ₹92.19, and ₹90.62 per litre in Mumbai, Chennai, and Kolkata, respectively.
Domestic cooking gas (LPG) price on Tuesday was also hiked by ₹50 per cylinder. A 14.2-kg non-subsidised LPG cylinder will now cost ₹949.50 in New Delhi.
This comes against the backdrop of oil prices continuing to rally globally with the EU weighing a ban on Russian oil imports. Around 9.30 am, the May contract of Brent on the Intercontinental Exchange was trading at $118.55, higher by 2.53% from its previous close. The April contract of the West Texas Intermediate rose 1.94% to as much as $114.30 a barrel.
Along with the persistent concerns over supply amid the Russia-Ukraine crisis, multiple attacks on oil facilities in Saudi Arabia by Houthi rebels of Yemen also led to a spike in prices on Tuesday.
Crude oil prices have gained 18% in the last four days, said Rahul Kalantri, vice-president, commodities, Mehta Equities.
Russia’s invasion of Ukraine and the eventual Western sanctions on its oil exports could mean 3 million barrels per day of Russian supply effectively cut off from global markets starting next month, the International Energy Agency (IEA) said in its oil market report for March 2022 released last week.
Crude oil prices, which touched multi-year highs during the first week of March, declined for few sessions of the last fortnight, before rising again on March 17. Brent had touched $139.13 per barrel, the highest since 2008, on March 7.
Last week, OMCs raised jet fuel prices by a steep 18%. In a first, aviation turbine fuel (ATF) prices are now above the ₹1 lakh per kilolitre mark. Further, the price of diesel purchased by bulk industrial buyers directly from OMCs have increased by ₹25 per litre. The high oil prices have been a cause of concern for India as the country imports 85% of its oil demand.
The Union minister for petroleum and natural gas, Hardeep Singh Puri, in reply to a question in Parliament, allayed fears of short supply of crude oil amid the Russia-Ukraine conflict. He said oil imports from Russia have been just 0.2% of total such imports till January this fiscal.
“We require a total of five million barrels per day. About 60% of it comes from the Gulf. We have imported from Russia just 0.419 million MT,” Puri said.